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Your Bank > Education and Advice > CNB University

Early Retirement – Are you Sure It’s what You Really Want?

Margaret Meyer
Margaret W. Meyer is Vice President - Personal Banking/Insurance Manager and can be reached at MMeyer@CNBank.com or (585) 249-4980 x41034.

Early retirement sounds tempting. It’s a goal for many folks. But for some, it falls into the category of: “Be careful what you wish for. You might just get it!”

Planning for retirement, particularly early retirement, tends to focus mostly on financial factors:

  • What are my income needs?
  • How much will be supplied by my pension and by Social Security?
  • When should I start Social Security?
  • How fast should I draw from my retirement funds?
  • Should I draw first from pre-tax or post-tax accounts?
  • How do I protect my assets if I need long-term care?
  • How do I ensure my spouse is secure at my death?
  • Will I run out of money?
  • What about inflation?

That’s a lot to think about! Fortunately, these issues can be addressed readily by working with a trusted financial planner to map out a workable retirement plan.

But money is only a part of the picture. Let’s assume that your finances are in order and you can retire safely. What about the “soft stuff”? Are you REALLY ready to retire? Let’s explore some of these non-financial issues.

How will you spend your time? Daily rounds of golf and the long-overdue painting of the bathroom can get old quickly. It is a particular challenge for early retirement, having just left a 25 or 30-year working career where you had an active, daily, structured routine in which you likely were called-upon to innovate and contribute continuously.

Remember, you may be looking at a 30-40 year retirement period – quite possibly longer than the total of your prior working years.

What are your spouse’s plans? It is common, particularly with early retirement, that spouses will not retire at the same time. This can present challenges. The working spouse may have increased expectations of the retired spouse regarding responsibilities around the house or may become resentful if the retired spouse sleeps in every morning.

Also, the retired spouse, given newly-found free time, may want to travel more, go south for the winter – something the working spouse is not as free to do.

Are you prepared for a change in social contacts? Work is a ready-made, automatic source of social contact. Losing touch with co-workers can be difficult under normal retirement circumstances. Early retirement may amplify the problem. Replacing such contacts with a new or expanded social network takes time and energy.

While these and other non-financial issues may be on your mind as you plan for early retirement, there are some things you can do to avoid or minimize these hurdles:

  • Prepare now. Think about what you truly want to do and how you’ll handle some of the issues noted above.
  • Don’t retire from work, retire to something else. Simply quitting work may not necessarily create a fulfilling, enjoyable retirement.
  • Practice your retirement before you retire. Hobbies are a good example. Your best chance to make this work is to develop outside interests and hobbies well before you clean out your desk and turn in your employee badge.
  • Consider volunteering. Whatever your capabilities are, it’s a good bet there are plenty of non-profit organizations that have the perfect fit for your time and talents. As with hobbies, cultivating these interests during your working years will make your community-service choices easier to make and more rewarding.
  • Talk it over carefully with your spouse and reach a common agreement on expectations.
  • Consider a second career. This is becoming a more popular option these days as people retire from their first careers earlier. An AARP survey of 1,500 employed workers, ages 45 to 74, showed that nearly 70% plan to work in some capacity in their “retirement” years. Many articles in the current and past issues of 55 Plus magazine highlight second and third-career choices made by local “retiring” workers.

Looking back on decades of work and life experiences, this is an ideal time to consider what you most would enjoy doing in the next chapter of your life – what you “really” want to do.

Once you’ve decided, get the necessary training or education, if called for, then just do it! This may be part or full-time work, hobby pursuits, or volunteering. Retiring to something meaningful provides a great psychological transition to ultimate full retirement as well as additional financial benefits if a follow-on career is chosen. 

This material is provided for general information purposes only and is not a recommendation or solicitation to buy or sell any particular security, product or service. Past performance is not indicative of future investment results. Any investment involves potential risk, including potential loss of capital. Before making any investment decision, please consult your legal, tax and financial advisors. Non-deposit investment products are not bank deposits and are not insured or guaranteed by Canandaigua National Bank & Trust, or any federal or state government or agency and are subject to investment risks, including possible loss of principal amount invested.